Why Don’t Employees Report Incidents to Their Employers Directly?

Beyond legal requirements, many companies institute a code of conduct to help establish an ethical standard for themselves and their employees. A code of conduct not only lays out what employees should and shouldn’t do, it helps explain why certain actions are restricted, and how those restrictions save employees, coworkers, and customers from abuse. Unfortunately, not everyone is motivated by conscience or a desire to keep the workplace safe and honest. Companies that want to ensure the effective application of their ethical regime, should take note of why ethics violations go unreported.

Violators Have Something to Gain

Although obvious, one of the most frequent reasons employees fail to report ethical violations is they gain some perceived benefit from that violation. If enough employees agree, a culture of silence can settle in. A simple example of this is frequently found in the service industry, where employees fail to clock out for legally required breaks. If compliance enforcement is lax, a community of workers may even begin to see this obvious breach of ethics as a “fringe benefit.” It’s important to build corporate structures that don’t allow for this kind of abuse.

Co-workers Have Something to Lose

The flipside of the “something to gain” coin is the employee that fears they may have something to lose if they report an ethics violation. This is just as common of a problem as employees trying to turn a profit or skim some benefit unethically, but is often far more pernicious. Many businesses have been brought low by a culture of fear that discouraged employees from reporting ethics violations. This is particularly true of companies in which management has begun breaking the rules. One need look no further than Enron or the Weinstein Company for examples of a once celebrated corporation ruined by the so called “philosophy of silence” that allows ethic violations to become widespread in those organizations.

Unrealistic Expectations

Another frequently cited cause of unreported ethical violations is the institution of unrealistic work expectations. Business is competitive, and employees who produce more, and more quickly, should rightly rise to the top. However, when a company puts in place a quota system or other mechanism that rewards too greatly, or punishes too harshly, based on employee productivity–ethical violations may become incentivized. One of the leading causes of the 2008 financial collapse was a widespread practice in the subprime mortgage industry of rewarding loan officers who brought in big numbers of loan applicants with little attention paid to the quality underlying those applications. Employees frequently ditched ethics guidelines in the hopes of scoring a big bonus check. This is both an example of how perverse incentives can create cover for bad decision making and how ethics needs to be instituted in a top-down fashion.

Failure to Enforce

Finally, the cause of many unreported violations that is most within a company’s power to fix is a culture of leniency towards certain violations or violators. If a company does not enforce its own rules, its employees are bound to become cynical. If they see their coworkers getting away with violation after violation, they’ll have no reason to report further violations to higher-ups. Worse yet, they may even begin violating the code of conduct themselves. A company that turns a blind eye, winds up stumbling in the dark.

Ensuring Incident Reporting

It is critical that companies give employees a means to report violations in a safe manner.  Then, when reports are made, company investigators must thoroughly investigate concerns.  Ethical Advocate enables ethical environments through providing such a means to report concerns and conduct investigations, including giving investigators and reporters a means to communicate anonymously.